Eurozone inflation slows to 2.2% in March

European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium. Eurozone inflation slowed to 2.2% in March. REUTERS/Yves Herman

BRUSSELS, Belgium – Inflation in the eurozone slowed further in March, calmed by an easing of energy tariffs and prices in the services sector, the EU’s statistics agency said on Tuesday.

Inflation in the single currency area reached 2.2 percent, down slightly from the 2.3 percent figure for February, Eurostat said, bringing the rate close to the European Central Bank’s two-percent target.

Inflation has gradually eased since a peak in October 2022 following Russia’s invasion of Ukraine, which sent energy prices soaring.

READ: Inflation eases to 2.4% in Europe, supporting likely central bank rate cut

The European Central Bank has pivoted from hiking interest rates to tackle inflation, to lowering them to boost the eurozone’s floundering economy.

Last month it lowered its benchmark deposit rate by a quarter of a percentage point to 2.5 percent, but its head Christine Lagarde warned of risks from US tariff threats and massive German spending plans.

Analysts at investment research group Capital Economics said the March fall in inflation “strengthens the case for the ECB to cut interest rates at the meeting on 17th April”, again by a quarter-point.

In March, inflation in prices for services eased to 3.7 percent from 3.7 percent in February, Eurostat said.

In energy, the rate was negative 0.7 percent, from 0.2 percent the month before. Food-price inflation accelerated slightly however.

The key measure of underlying inflation — stripping out the effect of volatile energy and food prices — also eased, from 2.6 to 2.4 percent.

Economists warn however that US President Donald Trump’s announcement of sweeping trade tariffs on other countries risks driving inflation up again and curbing growth.

Trump is scheduled to unveil his latest wave of tariffs on Wednesday.